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Friday, September 22, 2023

Crown gains after rate hike

PRAGUE: The Czech crown rose on Friday to its highest level since Feb. 21 as markets took in the central bank’s latest rate hike, while Hungary’s forint pushed higher before a closely watched election.

Central European markets generally drifted with worry over the Russia-Ukraine conflict still high. But stock markets in the region bucked global weakness and climbed, with Prague near 1-month highs.

The forint edged up to 367.80 to the euro before an election on Sunday when Prime Minister Viktor Orban faces a united opposition for the first time since he came to power in 2010.

According to the latest polls, Orban’s ruling Fidesz party has a narrow lead over the opposition alliance.

The crown was the main currency mover on Friday, rising 0.2% on the day to 24.40 to the euro by 1004 GMT. It touched a session high of 24.31 earlier.

The currency has had limited reaction to a Thursday interest rate hike that brought the base Czech rate to 5.00%, its highest since 2001 as the central bank kept up its fight against inflation.

With prices set to rise further amid fallout from Russia’s invasion of Ukraine, the Czech National Bank (CNB) said it was ready to continue raising rates.

Markets see scope for further rises, although growth worries – after the central bank said on Thursday this year’s growth outlook of 3% could be cut in half – could limit that room. Inflation has soared since last year due to supply chain problems, rising energy costs and strong consumer demand and wage growth. War in Ukraine is adding to woes.

Polish inflation surged to 10.9% in March, statistics office data showed on Friday, reaching double digits for the first time since 2000. The zloty was a tad down at 4.647 per euro.

Crown gains after rate hike

Source: Brecorder

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